KIERAN GILBERT: … with me this morning, Liberal frontbencher Parliamentary Secretary [to the Minister] for the Environment Senator Simon Birmingham on this, the first day of the 44th Parliament. Before we get into the politics, for many of those who have arrived here in Canberra at Parliament for the first time as Members of Parliament, it’s a significant day… I mean, a lot of focus on one new Member, Clive Palmer, but there’s 41 others in the Lower House, to begin with, before you even get to the Senate.

SIMON BIRMINGHAM: Well, good morning, Kieran, and yes, there’s those 41 Lower House Members. I think there are three new Senators taking their seats today and a swag of others who’ll come in July next year and it is an exciting day for them and their families. They all come, I think, with the right sense of responsibility, whatever side of the ledger they’re sitting on and I always think driving up to this very impressive building with its giant flagpole above it, it does set that scene for the important work you do here and that you hope, however short or long your time here is, whether it’s three years or 12 years or longer, that you leave having made a positive impression and done some good for the Australian people, which of course is what we are all here for.

KIERAN GILBERT: Let’s get to some of the issues around today and the head of the Prime Minister’s Business Advisory Council, Maurice Newman, has said some things overnight which the Labor Party has jumped all over, suggestions that wages are too high in Australia, the IR [industrial relations] system too rigid, the Government was too hasty in quarantining Health and Defence from spending cuts and he also… I’ll play a little bit for our viewers who haven’t caught up with it but responded to the audit commission [National Commission of Audit] and said that there will be some tough proposals put for cuts and that the Government really does need to take them up. Let’s take a look.

MAURICE NEWMAN: Now, the easy option will be simply to bend to these howls of outrage and to postpone the evil day and the Coalition before the last election limited its options by promising to spare Health, Education, Defence and pensions from the Budget axe and in government it has agreed to defer any controversial fiscal measures like tax reform until after the next election. Now, perhaps, with hindsight, this was hasty.

KIERAN GILBERT: Senator Birmingham, what do you make of some of those suggestions from Mr Newman?

SIMON BIRMINGHAM: Well, Kieran, as a Government, we’re not afraid of receiving frank and fearless advice but we will, firstly, honour our election commitments but, secondly, as a Government, we know we’ll have to take difficult decisions. We have inherited an economic and Budget basket case from the Labor Party, debt going to spiral past some $400 billion because of the way Labor mismanaged the Budget, so we know that we’ll have to make tough decisions – the Australian people appreciate that – but we’ll honour our election commitments as well. Every area of government will be looked at for efficiency. If you can find efficiency in the Health area, though, it will allow for reinvestment in parts of Health, hopefully. We’ll…

KIERAN GILBERT: But to Mr Newman saying that the IR system is too rigid, that people are paid too much, wages are too high. Is there any support for those views within the Government?

SIMON BIRMINGHAM: Well, Kieran, there are certain processes, out of our policies, we’ve promised to undertake in terms of reviewing aspects of industrial relations but, equally, we were very clear that, if they weren’t policy reforms announced before the election in relation to industrial relations, we would take them to the next election. We know that we’ll get some efficiencies, though, out of, as you just heard Laura [Jayes] say, reintroducing the Australian Building and Construction Commission, one of the first pieces of legislation [Building and Construction Industry (Improving Productivity) Bill] that will go into the Parliament this week, that can drive back down rates and costs in the building sector, which has such a big flow-through right across the economy, so we’re really confident that our policies can take the right steps in the right direction while maintaining public confidence that the Government will honour its election commitments.

KIERAN GILBERT: But the sort of language that Mr Newman was using – he’s the Prime Minister’s top adviser when it comes to business – saying that the disability scheme [National Disability Insurance Scheme] is too expensive, school funding too expensive… these are policies of your Government.

SIMON BIRMINGHAM: And, Kieran, Mr Newman, like every other Australian, is free to run his own critique. His advice is valuable advice to the Government and we will listen to it but we will then exercise our own judgement as to which policies we enact. We will honour our election commitments but we will get the Budget back under control. It will take time…

KIERAN GILBERT: Okay, well one of the things… one of the early bills, as well, will be to lift the debt ceiling. You mentioned one of those bills – it was second bill, I think; it will be after the carbon tax repeal [Clean Energy Legislation (Carbon Tax Repeal) Bill] – is to lift the debt ceiling [Commonwealth Inscribed Stock Amendment Bill]. Labor says you haven’t made the case for why that… well, the credit card, essentially, needs to… the limit needs to be increased. Let’s have a listen to what Chris Bowen had to say on the doors of Parliament this morning.

CHRIS BOWEN: Joe Hockey wants Australia’s biggest ever ‘no doc’ loan and the Labor Party will not facilitate it. The Labor Party will take a responsible and measured approach. We recognise that an increase in the debt limit is justified but an increase of $200 billion is simply not justified without Joe Hockey releasing his ‘mini-Budget’, so, when Joe Hockey moves the increase in the debt cap in the House of Representatives, we will move an amendment to only authorise an increase to $400 billion.

KIERAN GILBERT: Isn’t that reasonable, to want an explanation from the Government as to why you need to go to 500 billion, given there’s been no suggestion that it’s going to get anywhere near that – the debt level?

SIMON BIRMINGHAM: Well, this is just a case of the Labor Party burying their head in the sand. Every time under the previous Government we had a Budget update, the situation deteriorated. Their last figure suggested around $370 billion of debt but every single time it had deteriorated and it is little wonder that it has deteriorated again, pushing it past the $400 billion mark, so we have Labor, who created the problem through six years of reckless and wasteful spending, now trying to deny and fight the solution and the fix to their problem. We need, as a Government, to have economic confidence, budgetary confidence, confidence in the financial markets that we have the capacity to move in terms of government debt whilst we implement our policies to get that spending and that wasteful…

KIERAN GILBERT: It’s not about trying to blame Labor for all the debt increases; that if, you know, the debt ceiling has to be lifted again down the track that you might cop flak for it so why not do it now and let Labor take all the responsibility?

SIMON BIRMINGHAM: Well, Kieran, the Budget situation we inherit are successive deficit Budgets, not just in the past but going into the future as well, so Labor have left a terrible situation…

KIERAN GILBERT: And now blown out by some of the early decisions made by this Government?

SIMON BIRMINGHAM: Well, Kieran, the policies as costed by the Parliamentary Budget Office demonstrate a $700 million net improvement in the Budget position thanks to the policies the Coalition took to the election, so that’s just not true. The PBO did its work…

KIERAN GILBERT: Yeah, but there’s been a few other decisions made since… there have been decisions made since which the PBO didn’t look at like, for example, the Reserve Fund for the RBA [Reserve Bank of Australia] – 9 billion.

SIMON BIRMINGHAM: And there will be further decisions made that will see the Budget position improve. We’ve made that a clear commitment and the Australian people will judge us on that. Labor can vote up or down tax measures, spending measures as they choose through the life of this Parliament and we’ll debate it but what they are risking is a Washington-style debate, a Washington-style gridlock in this place, if they start playing around with the debt ceiling and that’s just irresponsible because it will have impacts not just for the political debate but for financial markets and right through the economy. They should accept that Joe Hockey has made clear the latest advice is debt will peak above $400 billion; therefore a $400 billion ceiling is inadequate. That’s why we’re putting forward a $500 billion limit.

KIERAN GILBERT: Prime Minister Abbott has said that the Renewable Energy Target, which both sides of politics support, of 20 per cent energy sourced by renewable energies by 2020… now, he’s saying that the Renewable Energy Target has a… he’s compared the price impact on people’s power prices to that of the carbon tax. Is this an early indication from him that the Government will scrap the Renewable Energy Target or at least weaken it?

SIMON BIRMINGHAM: No. Kieran, we said before the election there would be a review of the operation of the Renewable Energy Target next year. That statutory review will take place, as we promised and as we committed. From that, we’ll then look to see whether there can be improvements made to its operation but we equally said that we support the Renewable Energy Target. It was a reform introduced by the Howard Government. It’s something that we’ve continuously supported. It complements our Direct Action agenda. It actually delivers change in Australia, unlike the carbon tax.

KIERAN GILBERT: It sounds like Mr Abbott’s not a big fan of it, though, talking about the way it impacts on power prices.

SIMON BIRMINGHAM: Well, we do want to make sure, not just with the operation of the Renewable Energy Target but with the operation of energy markets overall, that we do whatever we can to sensibly reduce pressure on power prices and I would expect that, when the RET is reviewed next year, there’ll be consideration as to how its current operation is impacting on electricity prices and whether some improvements to it can minimise or reduce that impact in the years ahead. They’re sensible things for us to look at.

KIERAN GILBERT: But the big picture goal – you’re sticking to it?

SIMON BIRMINGHAM: We support the Renewable Energy Target. We want to improve it. We want to abolish the carbon tax to get power prices down. We want to make sure the RET works as efficiently as possible to keep power prices down and we want to address other energy market issues that can get power prices down.